EPI
- WISDOMTREE INDIA EARNINGS FUNDKey Information
Earliest date | 2008-02-26 |
About EPI
The Fund employs a “passive management” – or indexing– investment approach designed to track the performance of the Index. The Fund generally uses a representative sampling strategyto achieve its investment objective, meaning it generally will invest in a sample of the securities in the Index whose risk, return andother characteristics resemble the risk, return and other characteristics of the Index as a whole. Under normal circumstances, at least95% of the Fund’s total assets (exclusive of collateral held from securities lending) will be invested in constituent securitiesof the Index and investments that have economic characteristics that are substantially identical to the economic characteristics of suchconstituent securities. The Index is a fundamentally weighted index that is comprised of companiesincorporated and traded in India that are profitable and that are eligible to be purchased by foreign investors as of the annual Indexscreening date. To be eligible for inclusion in the Index, a company must meet the following criteria as of the annual Index screeningdate: (i) incorporation within India; (ii) listing on a major Indian stock exchange; (iii) earnings of at least $5 million during thepreceding fiscal year; (iv) market capitalization of at least $200 million; (v) trading of at least 250,000 shares per month for eachof the preceding six months; (vi) median daily dollar trading volume of at least $200,000 for each of the preceding six months; and (vii)price to earnings ratio of at least 2. The initial weight of a constituent in the Index at the annual screeningdate is based on reported net income in the most recent fiscal year prior to the annual Index screening date. The reported net incomenumber is then multiplied by a second factor developed by Standard & Poor’s called the “Investability Weighting Factor”(“IWF”). The IWF is used to scale the earnings generated by each company by restrictions on shares available to be purchased.The product of the reported net income and IWF is known at the “Earnings Factor.” Companies are weighted by the proportionof each individual earnings factor relative to the sum of all earnings factors within the WisdomTree India Earnings Index. On the Index’sannual screening date, the Index caps the weight of constituents exposed to any one sector at 25%. The Index also may adjust the weightof individual constituents on the annual screening date based on certain quantitative thresholds or limits tied to key metrics of a constituentsecurity, such as its trading volume. To the extent the Index reduces an individual constituent’s weight, the excess weight willbe reallocated pro rata among the other constituents. Similarly, if the Index increases a constituent’s weight, the weight of theother constituents will be reduced on a pro rata basis to contribute the weight needed for such increase. The weight of a sector or individualconstituent in the Index may fluctuate above or below specified caps and thresholds, respectively, between screening dates in responseto market conditions. WisdomTree, Inc. (“WisdomTree”),the Index Provider and parent company of WisdomTree Asset Management, Inc. (“WisdomTree Asset Management” or the “Adviser”),currently uses the Global Industry Classification Standard (GICS®),a widely recognized industry classification methodology developed by MSCI, Inc. and Standard & Poor’s Financial Services LLC,to identify the extent of the Index’s exposure to a sector or industry. A GICS sector typically is comprised of multiple industries.Because the Fund seeks to track the Index it is expected to have the same sector and industry exposure as the Index. While the Index’sand the Fund’s sector exposure may vary from time to time, as of June 30, 2024, the Index had significant exposure (e.g.,approximately 15% or more of the Index’s total weight) to the Financials and Energy Sectors. Tothe extent the Index’s constituents are concentrated (i.e., holds more than 25% of constituents) in the securities of companiesassigned to a particular industry or group of industries, the Fund will seek to concentrate its investments in such industry or groupof industries to approximately the same extent as the Index. The Fund seeks to gain exposure to Indian equity securities, in wholeor in part, through investments in a subsidiary organized in the Republic of Mauritius, the WisdomTree India Investment Portfolio, Inc.(the “WisdomTree Subsidiary”). The WisdomTree Subsidiary is wholly-owned and controlled by the Fund. Except as noted, referencesto the investment strategies and risks of the Fund include the investment strategies and risks of the WisdomTree Subsidiary.